Akamai Technologies Inc

Corporate governance · Shareholder rights and activism

Provisions of our charter, by-laws and Delaware law may have anti-takeover effects that could prevent a change in control even if the change in control would be beneficial to our stockholders. Our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors.

Organizational and management · Leadership and management changes

Additionally, if we are unable to appropriately increase management depth, enhance succession planning and decentralize our decision-making at a pace commensurate with our actual or desired growth rates, we may not be able to achieve our financial or operational goals.

Legal and litigation · Litigation and legal proceedings

Litigation may adversely impact our business. From time to time, we are or may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including patent, commercial, product liability, breach of contract, employment, class action, whistleblower, other litigation, claims and governmental and other regulatory investigations and proceedings.

Data and privacy · Data protection and privacy laws

Evolving privacy regulations could negatively impact our profitability and business operations. Privacy laws are rapidly proliferating, changing and evolving globally. Governments, private citizens and privacy advocates with class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data.

Industry regulation · Regulatory compliance and changes

Other regulatory developments could negatively impact our business. U.S. and international laws and regulations that apply to the internet, including content liability, security requirements, law enforcement access to information, critical infrastructure, net neutrality, so-called 'fair share' or internet content taxes, international data transfer restrictions, sanctions, export controls could pose risks to our revenues.

Tax and financial reporting · Tax compliance and changes in tax law

We may have exposure to greater-than-anticipated tax liabilities. Our future income taxes could be adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, or changes in tax laws, regulations or accounting principles.

Geopolitical and trade · Political instability and government changes

Additionally, we have offices and employees located in regions that historically have and may again experience periods of political instability, warfare or acts of terrorism, public health crises, changes in laws, trade barriers, and economic and trade sanctions.

Geopolitical and trade · International conflicts and tensions

Geopolitical destabilization, the escalation of international tensions and warfare have impacted and could continue to impact global currency exchange rates, resources from our suppliers, availability or pricing of energy and other inputs. For example, approximately six percent of our global employees are located in Israel, and have in the past been impacted by the Israel-Hamas war or other hostilities in and around or involving Israel.

Natural and catastrophic events · Climate change and environmental impact

The long-term effects of climate change on the global economy and our industry in particular remain unknown. For example, changes in weather where we operate may increase the costs of powering and cooling computer hardware we use to develop software and provide cloud services.

Digital transformation and innovation · Technology obsolescence and evolution

We rely on certain 'open-source' software, which may contain security flaws or other deficiencies. Open-source code is software that is freely accessible, usable and modifiable; however, certain open-source code is governed by license agreements, the terms of which could require users of such software to make any derivative works of the software available to others on unfavorable terms.

Digital transformation and innovation · Artificial intelligence and automation

We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results. In addition to ongoing investments to integrate AI and machine learning technology into our existing products and solutions, we recently launched AIC, a platform enabling AI inferencing at the edge of the internet, as a direct offering in the AI market.

Innovation and product development · Product development and randd investment risks

Innovation is important to our future success. The process of developing new solutions and product enhancements is complex, lengthy and uncertain and has become increasingly complex due to the sophistication of our customers' needs. The development timetable is uncertain and we may commit significant resources to developing solutions for which a viable market may not develop.

Market position and competition · Competitive pressure and market share loss

We compete in markets that are intensely competitive and rapidly changing. Our current and potential competitors vary by size, product offerings and geographic region and range from start-ups that offer solutions competing with a discrete part of our business to large technology or telecommunications companies that offer, or may be planning to introduce, products and services that are broadly competitive with what we do.

Customer and revenue · Customer retention and subscription renewal

If current and potential large customers shift to DIY internal solutions for content and application delivery or security protection, our business will be negatively impacted. While the number of customers implementing a DIY strategy had been decreasing, current global economic and geopolitical conditions may cause customers to increase their focus on DIY solutions.

Strategic execution · Merger acquisition and divestiture risks

Acquisitions and other strategic transactions could result in operating difficulties, dilution, diversion of management attention and other harmful consequences that may adversely impact our business and results of operations. Acquisitions and other complex transactions are accompanied by a number of risks, including difficulty integrating technologies, operations and personnel while maintaining the quality standards.

Market position and competition · Pricing pressure and margin compression

Revenue from our delivery solutions is impacted by pricing pressure due to competition and fluctuations in content traffic as a result of, among other factors, changes in the popularity of our customers' content including video delivery and gaming. Competition and pricing pressure has, and may continue to impact, revenue of certain of our security solutions, including during contract renewals.

Supply chain and procurement · Raw material availability and cost volatility

Akamai's platforms, products and services rely on hardware equipment, including hundreds of thousands of servers deployed around the world. Increasing demand and manufacturing limitations for certain necessary equipment or components may significantly impact pricing and availability. We are experiencing continued volatility in certain server component costs, including as a result of recently imposed tariffs.

Core operations · Operational disruption and business continuity

Our failure to manage new risks as our business evolves and our work practices change could harm us. Because most of our employees work remotely, we are subject to additional risks. For example, certain security systems in homes or other remote workplaces may be less secure than those used in our offices, which may subject us to increased security risks.

Core operations · Capacity utilization and efficiency

To operate and grow our globally distributed network serving our portfolio of services, we are dependent in part upon transmission capacity provided by third-party telecommunications network providers and co-location facilities to house our servers and equipment to support our operations.

International and currency · Foreign exchange and currency exposure

Because we conduct a substantial portion of our business outside the United States, we face exposure to adverse movements in foreign exchange rates, which could have a material adverse impact on our financial results and cash flows. Revenue generated and expenses incurred by our international subsidiaries are often denominated in their local currencies, but many of our expenses related to our operations in foreign jurisdictions are denominated in U.S. dollars.